Charge Through the Trough | H2:2025 Nigeria Strategy Report
From President Trump's Washington to Beijing, and then Tehran, the first half of 2025 delivered a steady stream of shocks that clouded the global economic outlook. The drama of tariffs, escalating Middle East conflict, and a more relaxed stance by major central banks weighed heavily on investor sentiment. But one thing was for sure: amid these disruptions, Nigeria's macroeconomic landscape quietly found its balance.Inflation eased, the Naira regained some composure, and the central bank's pause on rate hikes sent a clear signal of confidence. And as if on cue, yields trended downward, equities climbed 16.57% YTD, and risk appetite cautiously reawakened in the domestic capital markets.
As we enter H2:2025, the questions are no longer about if the recovery holds, but how far it can go. We are now thinking, “How much further will inflation fall?” “How deep will yield compression run?” “How quickly will earnings catch up to valuations?” With system liquidity set to rise, the Naira holding firm, and the probability of a rate cut increasing, the stage is set for capital rotation, from fixed income to equities, and from cash to risk assets.
Our view? Be selective, not defensive. Position in high-quality dividend payers poised to benefit from the improving backdrop, and bonds with headroom for price gains. In a year shaped by global uncertainty, Nigeria's second half may just offer something rare: a chance to charge through the trough.
ARM Securities Limited is a full-service brokerage house that offers best-in-class brokerage services to local as well as foreign private and institutional investors. Formerly known as Hamilton Hammer, the Company commenced operation in 1994 and was acquired by ARM Investment Managers in 2008--an acquisition which has successfully re-positioned the company as a recognized brokerage firm in Nigeria. The Company is a dealing member of the Nigerian Stock Exchange (NSE) and is regulated by Securities and Exchange Commission (SEC). ARM Securities research team provides insightful commentaries on the Nigerian economy and its equity and debt markets using an approach which incorporates a thorough understanding of the fundamentals of the industries and companies under coverage. The research therefore adopts an integrated methodology of top-down analysis and bottom-up stock selection, which focuses on publicly quoted companies on the Nigerian Stock Exchange that are judged to offer the highest potential for earnings growth. In addition, its analysts provide periodic commentaries on a range of topical global and local issues which provide investing clients with a holistic view of the opportunities and risks in today’s financial market landscape.
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